To remain competitive, MN must look to middle

Date Published: 09/04/2014

Author: Dane Smith

ST. PAUL LEGAL LEDGER CAPITOL REPORT

The term “alignment” has long been the dominant buzzword in workforce policy circles. And the bar graphs on the most recent report by the National Skills Coalition provide a useful if simplistic big picture view of the mismatch between jobs and workforce readiness in Minnesota and the United States.

The bars show that Minnesota currently has a slightly larger percentage of people with four-year degrees than it has jobs that require four-year degrees. Meanwhile, Minnesota has more demand than supply for workers with some education attainment beyond high school, but less than a four-year sheepskin.

Currently 51 percent of Minnesota jobs will require these “middle-skill” credentials and diplomas, but only about 47 percent are trained to that level. Both now and in the near future, through the year 2020, demand for “middle-skill workers” will remain strong.

Beyond that very general breakdown, it’s easy to imagine how the misalignment and mismatch in a fast-changing economy
grows even larger for specific jobs within the big three pieces on the pie chart. The “Occupations in Demand” webpage maintained by the Minnesota Department of Employment and Economic Development (DEED) shows that three of the top five “in demand” job titles — nurses, software developers and computer system analysts — also demand post-secondary credentials.

The charts also reveal a flaw in the federal governments’ statistical measurement of what’s really demanded in today’s workforce. And this shortcoming has already created controversy in the gubernatorial election campaign debate about the relative health of the Minnesota economy.

Critics of Gov. Mark Dayton are alleging that the state’s official 53 percent “underemployment” rate — the reported percentage of workers who have more education than is demanded in their jobs — is a sign of an economy that’s much weaker than Dayton claims it is. By implication, that statistic also would give strength to folks who say the state does not need to invest more in education and training.

But as the Associated Press reported recently on this dispute, the federal government standards on which the underemployment rate is based do not align with reality. The federal data stipulates that police officers only need a high school diploma, for instance, when in fact Minnesota standards and the real-world demands of the job for years have required much more than that. There are many different levels and kinds of jobs for police officers, but almost all of them require a two-year or four-year degree.

Similarly the, DEED chart showing Occupations in Demand states that only a high school diploma is sufficient for “social and human service assistants,” for “customer service representatives,” for “heavy and tractor-trailer truck drivers” and for many other positions that in practice tend to require at least some post-secondary education and certification. If they don’t require it, in the real-world competition for these jobs, applicants with credentials and experience are more likely to get those jobs.

Business leaders and higher education officials, particularly the Minnesota State Colleges and Universities system, have been trying harder and working closer together in recent years to get the alignment right. The challenge is to anticipate what employers and an increasingly complex and global economy will demand, and then to nudge young folks and incumbent workers in to those fields.

One of the thornier problems is that the demand for science, math and engineering expertise is increasing. And too many students — especially those from historically disadvantaged and low-income backgrounds — are stuck with an opportunity gap. Minnesota kids of color too often are behind before they arrive in kindergarten and continue to lag all the way through, resulting in one of the nation’s largest disparities at the end of the pipeline, in education attainment and unemployment levels.

This opportunity gap actually is the more serious underlying “misalignment." Minnesota is rapidly becoming a much more racially diverse state. The percentage of our kids under the age of 5 who are non-white is about 30 percent, double the percentage in the overall population. Our future rests squarely on their ability to achieve middle-skill credentials and more.

A better way to frame this is that the underlying racial equity misalignment presents our greatest opportunity to solve the middle-skill misalignment problem in both our near and long-term future. A relentless focus on equity — beginning with major new investments in early childhood education and on cradle-to-career improvement in the achievement and attainment levels for children of color and for low-income families — must begin to dominate state-and-local policymaking in Minnesota.

But that’s not all we must do to strengthen our economy. The dirty little overlooked fact in the National Skills Coalition’s study and other recent statistics is that Minnesota’s economy is still growing a lot of low-skill, low-pay jobs. In fact, as a percentage of the total, low-skill jobs amounted to 16 percent in 2012 but new openings for low-skill jobs are projected at 19 percent over the course of the entire decade that ends in 2020.

If this projection is accurate, and if pay and benefits for low-skill jobs do not catch up with big losses that the bottom end of the ladder has suffered recent decades, already unsustainable economic inequality trends will worsen.

An evaluation last year of workforce development providers by the Phillips Family Foundation of Minnesota found that despite some encouraging results by nonprofit providers in upgrading the employability and placement rates of low-skill African-American and female workers, many were still stuck at pay levels that left them near poverty or below livable standards.

Growing inequality at the bottom for people who are actually working results in reduced aggregate consumer demand for the goods and services our Minnesota businesses need to thrive, not to mention rising taxpayer costs for corrections and safety net programs.

Major progress was achieved on lifting minimum wage levels in the last session, but Minnesota in 2015 and beyond will need to continue to drive toward higher livable wages, economic security through universal health-care coverage, union representation and negotiating rights for our workers in those low-skill jobs, and benefits such as paid family leave policies.

The National Skills Coalition, in another recent assessment of state-by-state progress, praises Minnesota for 2014 legislation that improves reporting and accountability for workforce training programs. But the coalition also is clear about the need to appropriate and invest more public money for these purposes. Here’s the coalition’s bottom line advice:

“What’s the solution? States can increase investments in middle-skill education and training and target these investments to support proven strategies like sector partnerships and career pathways, as well as data and credential measurement efforts that allow policymakers to see what they are getting for their investments.”

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A version of this column originally appeared in the St. Paul Legal Ledger Capitol Report on Thrusday, September 4, 2014.